CSA invites fintech businesses into regulatory sandbox

By The IJ Staff | February 27 2017 09:45AM

Photo: Freepik

The Canadian Securities Administrators (CSA) has launched a “regulatory sandbox” initiative aimed at both supporting fintech businesses and protecting investors.

In a Feb. 23 announcement, the CSA says its regulatory sandbox welcomes businesses that are “truly innovative from a Canadian market perspective.” Business models will be assessed on a case-by-case basis and businesses that register or receive relief may be allowed to test their products and services across the Canadian market.

Appropriate investor protection

Louis Morisset, CSA Chair and President and CEO of Quebec regulator, the Autorité des marchés financiers, said the goal of the initiative is “to facilitate the ability of those businesses to use innovative products, services and applications all across Canada, while ensuring appropriate investor protection….” 

Types of businesses that could be eligible to participate include: online platforms, including crowdfunding portals, online lenders, angel investor networks or other technological innovations for securities trading and advising; business models using artificial intelligence for trades or recommendations; cryptocurrency or distributed ledger technology based ventures; and technology service providers to the securities industry, such as non-client facing risk and compliance support services (also known as regulatory technology or regtech).

Application process

To apply, businesses may contact their local securities regulator, which will refer it to the CSA regulatory sandbox “if it provides genuine technological innovation in the securities industry,” underlines the CSA.